Although it’s still early in the process, the transition to the ICD-10 coding system by all accounts is unfolding more smoothly than many observers expected. Reports nonetheless indicate that unexpected denials may be occurring. As a result, McKesson experts recommend that providers continually monitor their revenue cycle to determine if claims are being inadvertently rejected by payer systems.

“Most of us in the healthcare industry went into October 1 anticipating the worst and hoping for the best,” said Mark Canada, regional vice president of operations with McKesson Business Performance Services (McKesson). “We haven’t seen as many hiccups as there could have been and to a great extent, it’s a better story than most predicted. But now that we’ve begun reviewing payer activity, we have to take what we are seeing and intervene where we can.”

Front-end edits

According to Canada, front-end edits that have not been fully updated to accommodate ICD-10 have been periodically rejecting post-October 1 claims that are payable per the carriers’ policies. He said the problems have occurred with Medicare and Medicaid intermediaries as well as commercial payers. If an unexpected rejection occurs, Canada said providers and their billing teams should make contact with their front-end editing software vendor and report any discrepancies they’re seeing.

“Front end edits play a crucial role in helping providers avoid denials before they occur,” Canada said. “Given the number of new codes involved, however, ICD-10 has created more complexity in claims processing. If the edits are not current, this can slow the claims submission process and will ultimately impact cash flow.  A sudden increase in rejected claims could indicate that there is an issue with mismatched procedure codes, diagnosis codes, and/or modifiers submitted with the claims.”   

Canada cited several examples of front-end edit problems nationwide:

  • For venous extremity studies, the code for peripheral vascular disease, I73.9, is payable per Medicare policy but has been getting rejected by edits.
  • E codes have been rejected as a “secondary diagnosis only” when, in fact, they are valid primary codes in ICD-10.
  • One commercial payer did not include ICD-10 covered diagnoses in their payer policies, only ICD-10 diagnosis descriptions.

Uncertainty about unspecified codes

Tanya Kotwica, manager, business support at McKesson, said multiple questions also continue to surround the use of “unspecified” codes. Earlier this year, the Centers for Medicare & Medicaid Services (CMS) announced that ICD-10 claims would not be denied based on a lack of ICD-10 specificity for one year following the October 1 go-live date, providing that the physician/practitioner used a valid code from the correct family of codes.

Kotwica said most providers understood this to mean that an unspecified code could be used in place of a more specific ICD-10 reference. However, she said multiple reports have surfaced of Medicare and Medicaid intermediaries denying claims based on the use of unspecified codes and requiring greater specificity than had been expected.

For example, Kotwica said, some radiation treatments are being rejected if unspecified. She said this apparently reflects carrier assumptions that if a clinician is providing radiation therapy, they should know which portion of the body is being radiated prior to the procedure. Therefore, the location where the radiation is being applied must be included or the claim will likely be denied due to lack of medical necessity.

In addition, clinicians documenting edema are finding that they must choose a localized code or risk a denial. Similarly, the location and cause of cerebral infractions and occlusions must be stated or the claim could be rejected for lack of medical necessity. Finally, laterality must be included on reports of pain in limb or the claim could be rejected, Kotwica said.

In one instance, Kotwica said, Georgia Medicaid was denying J18.9, pneumonia unspecified organism, but when challenged, asserted that this diagnosis was no longer considered “unspecified.” Providers were asked to resubmit claims for reprocessing.

“You really need to keep an eye out and pay attention to why claims are being rejected,” Kotwica said. “Because what we’re finding is that regardless of direction from CMS, some local carrier determination (LCD) administrators are taking a different path.”

Separately, a number of commercial carriers have stated that they will not follow CMS guidance regarding the use of unspecified codes. (See “CMS Offers Grace Period for ICD-10 Specificity But Not All Payers Follow Suit” in the November issue of ReveNews.)

Canada and Kotwica said that when a claim is rejected or denied for reasons that aren’t readily apparent, it is important for providers to quickly contact the payer and challenge the denial. If nothing else, this will compel the carrier to provide specific information regarding what is acceptable and physicians can then be informed of any additional documentation requirements.

Behind the curve

According to Canada, another problem that has cropped up post-October 1 involves insurance companies that are still unable to process ICD-10 codes. In most instances, the ICD-10 code must be crosswalked back to ICD-9 for submission. As of mid-November, the following companies were accepting only ICD-9:

  • Insurance Service of Lubbock
  • Inter-Americas Insurance Corporation Inc.
  • Principal Financial Group
  • Southern Benefit Services LLC
  • State Auto Insurance Companies

CMS says rollout on track

In late October, CMS reported that the volume of daily claims submitted between Oct 1 and Oct. 27 averaged 4.6 million, which the agency said was consistent with the historical baseline. Likewise, CMS said that 10.1% of total claims processed were denied in October, versus 10% of total claims historically.1

Providers with questions or concerns surrounding ICD-10 can contact the CMS ICD-10 Ombudsman, William Rogers, MD. Rogers is a practicing emergency medicine physician and director of CMS’s Physician Regulatory Issues Team.2 Providers can contact the ombudsman’s office via ICD10_Ombudsman@cms.hhs.gov. All others with ICD-10 questions should contact the ICD-10 Coordination Center via ICD10@cms.hhs.gov.

Canada said the overriding takeaway in the post-ICD-10 era is not much different than the primary rule for avoiding problems in ICD-9: Claims and coding will only be as strong as the underlying documentation.

“When in doubt, document it, since it’s better to have too much documentation than too little,” he said.

1 “ICD-10 Transition Moves Forward,” CMS press release, Oct. 29, 2015.
2ICD-10 Ombudsman and ICD-10 Coordination Center,” CMS press release, Oct. 5, 2015.

McKesson

About the author

McKesson Business Performance Services offers services and consulting to help hospitals, health systems, and physician practices improve business performance, boost margins and transition successfully to value-based care.